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A Division of the Infinite Freedom Foundations of Budapest, Hungary.
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  • The Round Robbings Of Rotational Relationships In Regulated Robbery

    "Wells Fargo & Co. (NYSE:WFC) failed to hand over documents demanded in U.S. subpoenas and should be forced to cooperate with a probe into its sale of almost $60 billion in residential mortgage-backed securities, regulators said", according to Bloomberg.

    What Bloomberg and the SEC do not know is how the bankers play the bad asset transfers amongst themselves to postpone their own inevitable collapse and loss of employment at their institutions.

    Who did WFC sell $Sixty Billion$ worth of mortgages to in the past six years? It is not clear because neither the Wall Street Journal or Bloomberg, the SEC, the Justice Department or the Federal OCC, or even the secret service do not understand how robbery occurs under the current financial systems computerized trading models.

    "The SEC is looking for evidence that firms failed to disclose underlying credit weaknesses in mortgage pools and delinquencies, and has also told Goldman Sachs Group Inc. and JPMorgan Chase & Co. (NYSE:JPM) that they may face civil claims," says Bloomberg.

    Unfortunately, unless the attorney's at the SEC understand the mortgage loan origination process they will always be looking for the wrong source and fine the wrong target. Fraud begins with loan officers, loan processors, and loan underwriters who originate loans.

    Why have they not investigated and barred hundreds of thousands of mortgage brokers, many of whom also have real estate licenses as in California, or act as Realtors, found guilty of committing fraud in the loan application process? Because they don't have the knowledge or the manpower to do so in an efficient and cost effective way.

    Instead they try to create new laws and regulations to bar new entrants into the industry if their names have been tarnished from the wreckage of the 2008 meltdown, Act 2 as pending news of more trouble in the financial sector mounts.

    They have to look at the borrower, look at the loan officer, the loan processor, the loan underwriter, and then look at the heads of each mortgage brokerage and mortgage banking operation in America to clean up the whole mess which is still many eons away.

    Then they need to look at the loan servicers, the mortgage traders, the secondary marketing officers, but because most brokerages are private, not publicly traded companies, the SEC has no jurisdiction other than to go after the public stock companies whose capital rests on the validity of their "air assets", and their trading in the marketplace on a ship of titanic fools, who don't know the ship is still sinking.

    According to Housing Wire, "There are currently 11.1 million borrowers who owe more on their mortgage than the house is worth, according to CoreLogic ($16.63 0%). Of that, estimates show roughly 3.3 million of those mortgages belong to Fannie and Freddie."

    Why is the SEC not following the paper trail from the bottom of the ponzi scheme to the trading floors of Wall Street? Do executives at BAC, WFC, JPM, who together hold more than $4 trillion in inflated assets, including housing related mortgages, ever look at the originating paperwork that creates a phony loan in the first place?

    Where are the SEC charges against WFC, BAC, FNM, FRE, JPM, and the rest of the big 12 mortgage market players for "knowing or should have known" about the fraud contained in no income no asset loans? It's called "scienter", but is it being broadly applied to every employee at thse big five too big to fail institutions? No, because "we don't have the manpower" according to SEC officials.

    It doesn't take a lot of manpower to realize after a few years of being in the business that the entire mortgage industry and banking industry itself is no better than the pea sharks on the streets of New York City who get you to gamble under which cup the pea is situated.

    The only difference between the street con and the wall street traders is that there are many more cups to hide the pea (fraud) under in the world of finance.

    It's all regulated robbery to me. No one wins in the long run and there is a lot of suffering in the world. Like I tell my disabled banking buddies, there are no jobs out there, but there sure is a lot of work to do.

    Jon Prior wrote, "Mortgage lending will not return until firms figure out how to better automate an underwriting process overloaded with new rules but still being done by hand, according to entrepreneur Bill Dallas.

    "Dallas founded First Franklin and is chairman of Diversified Capital, another large mortgage operation. His newest venture is Skyline Mortgage located on the West Coast. Dallas is building out a system that will allow his network of brokers to underwrite mortgages by checking off various compliance issues from new Dodd-Frank provisions to Real Estate Settlement Procedures Act requirements."

    First Franklin was sold to Merrill Lynch who in turn was taken over by BAC. Dallas has overseen the origination of more fraudelent mortgages than Franklin Raines or the former head of Countrwide, Mozzillo, combined.

    In the end, only a zero interest mortgage program and the creation of the secondary market for them, along with a major change in income tax laws (cancel the the mortgage interest deduction and give people tax credits for paying off their mortgages early) will save the mortgage industry from complete collapse.

    All these "Top Executive" people still trying to keep the industry going are just the "walking dead" and in my book, I always let the dead bury the dead.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Mar 24 1:45 PM | Link | 3 Comments
  • Caveat Emptor To Those Who Are Long On Financial Stocks
    "The deepest and longest recession since the 1930s will end in the second half of 2009", Wells Fargo & Co. economists said in their annual forecast, many years ago. Can you trust Wells Fargo Company and their employee's opinions?

    "The third quarter of next year will be "better than expected" by many, said chief investment strategist Jim Paulsen. "It's like you're at a cookout and you're trying and trying to get your charcoal going and you keep squirting on lighter fluid and all of a sudden it goes 'poof!'"

    How accurate was that statement and if not accurate then misleading? And why is the SEC not serving a Wells Notice on Warren Buffet, WFC, and the other economists who make money touting good news for the economy?

    Paulsen said "fear mongering" by government officials who were trying to sell the $700 billion Troubled Asset Relief Program in the fall made the situation much worse, freezing everyone in their tracks and bringing on "economic paralysis." Nothing the Banks or the government have done so far has solved the global meltdown which continues to occur in soft assets pushing prices of metals and hard assets skyward. Not even real estate is considered a hard asset by most Europeans these days. After all, what are you buying other than a piece of paper backed by another piece of paper when you deal in the US Monopolised Dollar Market.

    Senior economist Scott Anderson predicted that "housing will lead the way back". "One bright note is that the sector that led the economy into this morass is about to turn the corner, perhaps as soon as this summer, and will start to lead us out."

    That false and misleading statement probably cost a lot of people a lot of money in their overinflated ponzi structured retirement nest eggs. Why is the SEC not investigating Mr. Anderson?

    The job market is still one of the worst in decades, with another 3.7 million jobs expected to be lost next year, Anderson said back then.

    That means 5.5 million jobs will be lost in this recession, twice as many as were lost in the 1981-1982 recession, the second worst since World War II.

    But what about the 22 more million more homes that are just starting into the foreclosure process because people who bought them know that the ponzi game is collapsing so why through good money after bad mortgage debt?

    Why is the SEC not investigating and prosecuting the more than 40 million fraudulent loan applications taken under the liar loan programs promoted and funded by BAC a la Countrywide and Washington Mutual, and JPM and C, and fining those people hundreds of thousands of dollars, barring them from ever taking out a loan application again or buying or selling any real estate in America ever again? How just would that be?

    Senor economist Eugenio Aleman said he is concerned that injecting of hundreds of billions of dollars into the economy through the financial sector is not helping those who need it most. Who needs money the most?

    Why bankers do of course, otherwise they would not have gotten all those federal bailout funds and then settled for $30 billion for all the fraud that is still extant in the global markets for US Real Estate Backed Phony Electronic Paper. It's such a sham you have to be able to view things from the viewpoint of a trillionaire. Buffet, Gates, Soros, Slim, none of these guys get it.

    Short the thousand or so troubled banks out there still and stay tuned to mortgage meltdown phase two.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Mar 12 2:16 AM | Link | 2 Comments
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